MetaTrader is the most widely used and popular trading platform among retail forex brokers. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are products officially launched by MetaQuotes on July 1, 2005, and June 1, 2010, respectively.You can think of them as the iPhone 4 and iPhone 5 in the Apple lineup. MT5 is the next-generation upgrade to MT4 ; it builds on the success of MT4 and has been optimized in many areas, so there are significant differences in functionality between the two.
Many brokers have switched from MT4 to MT5 because of two key features of MT5: faster backtesting capabilities, including the ability to test multiple currency pairs simultaneously, and greater data diversity.
First, let’s talk about the backtesting feature and testing across multiple currencies:
We all know that unless a strategy is put into practice or tested, it’s impossible to know how good or bad it is, and MT5 allows you to backtest using historical data from multiple instruments. For example, if you’re trading two or more instruments,
MT4 doesn’t support this because backtesting on MT4 is limited to a single instrument, so you can’t determine how effective an EA is.MT5, however, is different. You can backtest multiple instruments to verify the feasibility of various strategies. For example, if you incur a loss on Instrument A, can you hedge that loss using a combination of Instruments B and C, or by using a specific class of instruments on its own? All of these scenarios can be tested in MT5.
Let’s take a look at the data diversity of MT5:
1. More accurate data is available for backtesting: Unlike MT4, which requires you to download historical data before use, MT5 allows you to perform backtesting directly with historical data. It also offers a delay function to simulate live trading;
2. More timeframes: Unlike MT4, which offers only a few timeframes, MT5 adds a wide range of options—from as short as 2 minutes to as long as 12 hours—for a total of 21 different timeframes;
3. Economic calendar: While MT4 does not support this feature, MT5 includes an economic calendar, providing greater convenience and support for investment strategies.
In addition to the major feature upgrades mentioned above, MT5 offers even more enhanced and user-friendly features for you to explore.
As for why MetaQuotes upgraded MT4 and launched MT5, I believe it’s mainly because pirated versions of MT4 are rampant on the market. On the one hand, this has led to frequent incidents that undermine the healthy development of the market, such as erroneous trading data and some platforms arbitrarily altering market quotes;on the other hand, the rampant piracy of MT4 has eroded MetaQuotes’ profits, making the launch of MT5 an inevitable step.
In the future, MetaQuotes may stop updating MT4. When that happens, hackers will exploit vulnerabilities in the MT4 system, which will directly affect traders’ interests. Therefore, upgrading from MT4 to MT5 is not only an inevitable product upgrade strategy for MetaQuotes, but also the direction in which traders’ future trading platforms are headed.
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